Angel investors for start-up ventures

ShubhashishJan 15, 2008, 09.25pm IST

Many of us have ideas, zeal and the commitment to be entrepreneurs. What we don't have is the money! But if every good idea had to be sacrificed on the altar of money then there would never be a start-up. Angel investors fill that gap, and invest in the ideas of others and help them in achieving their objectives.

They, apart from investing money, provide assistance in the execution of the business plan, build a network of reliable and resourceful contacts for their ventures and even provide them timely guidance! Meet three such angel investors, Pravin Gandhi, Dr Sridhar Mitta and Bharti Jacob who are making lives of budding businessmen a smooth ride!

The seasoned angel!

Pravin Gandhi started his first company, Hinditron, way back in 1972. "We merged Hinditron with Digital Equipment Corporation and went public in 1988," he says. After four years in the merged entity, Gandhi decided to pursue angel investing as a career alternative. In 1999, he started 'Infinity Venture Fund', an early stage fund. Gandhi didn't stop at that and he went ahead to create another fund called the 'Seedfund' just last year.

He says that he has always been an entrepreneur at heart and at one point in your life; a stage comes when you think that you have worked hard and don't have to commit to the operational work anymore. "It is then you think of being an angel investor!" he says.

Gandhi has been an investor through his two funds in start-ups like Printo, Indiagames and carwale.com among many others. He says that choosing a company to invest in is a tough task. "The decision is a combination of two aspects, firstly, whether the team is good and responsible enough and secondly, the idea. As an angel investor, one must learn to assess the competencies of the entrepreneurs," he shares.

India Inc's M&As rise 150% in 2007 Gandhi adds, "The term angel investor in itself means a lot more than just investing money. One has to work closely with the team and develop the idea into something more marketable," says Gandhi. Of the many companies he invested in, Gandhi feels that Indiagames is his favourite! "They were a bunch of over-qualified enthusiasts who share the same passion for gaming. I admire the way those guys steered through the good and bad times. Being an angel to them was a joyous experience," he smiles.

A social angel!

An electrical engineer from IIT-Kharagpur and a PhD from the US, Dr Sridhar Mitta is a seasoned entrepreneur with a total work experience of over two decades. "My last two years were spent in the Silicon Valley to set up a company which was backed by Wipro," he says.

However, Dr Mitta decided to quit and pursue something different. He then teamed up with K B Chandrashekhar and set-up e4e. "e4e stands for 'entrepreneur for entrepreneur' and the basic idea is to spend time in promoting social entrepreneurship," he informs. He says that his last two years in the Silicon Valley made him take notice of angel investing and he joined 'The Indus Entrepreneurs (TIE)', a non-profit global network of entrepreneurs.

It gave him a good perspective and he realised that a good entrepreneur has to be a part of the Silicon Valley's ecosystem to succeed. "Can we create that ecosystem in India without travelling all the way to the West was the basic idea," he says.

Dr Mitta asked himself that obvious question, can you create multiple companies using entrepreneurship? "To do that, we needed a lot of help from various sources and that's how, the idea to set-up e4e labs struck us. We identified entrepreneurs, gave them an initial funding to gain a foothold in the industry, and helped them grow," he adds.

In TIE, I developed a programme that takes the help of all the charter members and uses small amounts of money and contact details to graduate the entrepreneurs from a basic idea to an advanced stage of inception," he says. Dr Mitta, with the help of the programme, got over a 100 applications and they selected four out of them to fund. "Out of the four, three have managed to get venture capital funding," he exclaims.

An institutional angel!

Bharti Jacob has always been an investor, prior to venture investing; she was an investment banker in the US. "Investing has always interested me, especially early-stage investing. I always felt that investing goes well with my experience and it's fun to work with young companies. They have a lot of ideas and are brimming with enthusiasm," she says.

Jacob feels strongly to remain in early-stage investing only as she experiences tremendous amount of gratification in seeing a small company grow big. She says that the most exciting part of being an investor is the opportunity I get to work with young minds. She says that in the process to choose the venture to invest in, the most important factor is the core team.

"It is important to understand whether the team has the passion for the idea or not and whether they are willing to learn," she explains. "Everything else is secondary; the core team comes first." When it comes to investing in the company, she looks at the degree of innovation involved and the technological requirements of the companies. "In the past 16 months, we received around 500 applications for funding and we shortlisted around seven which we thought were worthwhile," she concludes.

So if you have an idea, the zeal to do it but empty pockets, well don't worry as an angel might just be round the corner to bail you out!